In the last year, the National Labor Relations Board and the Federal Trade Commission (FTC) have teamed up to declare war on “non-compete” agreements. Non-competes are agreements that workers are forces to sign saying they won’t go to work for a competing employer in the same industry for a certain amount of time after they leave an employer. One-sided agreements, they keep wages down because they limit workers’ leverage and employment options.
In April the FTC issued a rule banning non-compete agreements nationwide, saying they’re an unfair method of competition. The rule was supposed to take effect in late August, but on August 20, 2024, a federal judge in Texas struck down the rule, saying the FTC didn’t have legal authority to ban non-competes.
But the NLRB is pressing forward under the law it was set up to enforce, the National Labor Relations Act. On Oct. 7, NLRB General Counsel Jennifer Abruzzo directed all field offices to prosecute employers who require that their employees sign non-compete agreements, and seek damage for any lost earnings that result.
Meanwhile, state laws in California, North Dakota, Minnesota, and Oklahoma already ban non-compete agreements outright, meaning that they’re legally unenforceable. Nine other states, including Oregon and Washington, allow them, but only for management-level employees above a certain income threshold. In Oregon, the threshold is currently 113,241. In Washington, it’s $120,560. Employees making less than that can ignore any non-compete agreement they may have signed, because they are not legally enforceable.